The best recommendation anyone can receive is from someone who has used the service. Laurie Baugh, or more importantly, his clients are no exception.
Broker Laurie was looking to strike out on his own and didn’t have the money, or so he thought, to launch his own business.
The solution was found in his pension pot and now Pension-led funding comes highly recommended by Laurie.
He turned to Pension-led funding initially to help a client fund a property deal but decided the best way to understand the business funding possibilities, and become his own boss, was to go through the process himself.
“It’s been a real eye-opener,” he said. “I found Pension-led funding to be a very pragmatic and effective funding solution for my business and me personally which has provided me with some financial independence and flexibility.”
Laurie, who has a background in banking and Asset Finance, sees himself as a Commercial Finance Packager with his business, Camberley-based Rathstones Financial Ltd, part of the Synergy Commercial Finance network.
His focus is the commercial property sector and said tapping into a pension could be the difference between his clients clinching a lucrative deal or not.
Before joining Synergy Laurie had a maximum of 10 funder contacts but overnight that increased to between 40-50 property-specific lenders and a wider panel of 140 plus business loan and leasing companies to work with.
He believes Pension-led funding sits perfectly in that portfolio as a largely-untapped source for his clients looking for property developing finance, commercial mortgages, bridging loans and buy-to-let mortgages. So much so, Laurie is to recommend all his broker contacts ask their clients a simple question: “Do you have a pension?”
“Some of my clients can be stretching themselves on deals to suit the bank. That is a conversation I need to be having with people. I feel pretty confident that I can identify an opportunity and have a meaningful conversation with a client, even if it is just using my example to bring it to life,” he said.
“I’m not going to be just a customer, I’m going to be able to introduce clients.”
Laurie’s existing pension pot was transferred into a Self-Invested Personal Pension (SIPP) and 42 per cent used to make a preference share investment in his business with a 15 per cent coupon, the remainder placed in a low-risk investment profile with PLF sister company and pension provider Morgan Lloyd.
“I see PLF as low risk because I’m in control of the money and want my pension fund to have it. Paying back a preference share dividend free of tax is a very strong reason. It was by far the best option to do what I wanted,” he said.
“I’ve got the opportunity to make the money work. I would rather the interest goes back to my pension than to anyone else. The company is paying back into my pension fund at a 15 per cent interest rate.”